BENGALURU: Alphabet said its cloud business rose 54% to $4.6 billion in the second quarter ended June 30 as more companies undertook digital transformations of their businesses during the pandemic. The company said it is looking to make further investments in the cloud business, where it trails significantly behind Amazon Web Services and Microsoft Azure.
The business, however, has grown exponentially under Google Cloud CEO Thomas Kurian. When Kurian, a former Oracle executive, joined in January 2019, the segment had revenue of just $5.8 billion. This jumped to $13 billion in two years.
Alphabet CEO Sundar Pichai said customers are looking at cloud for a variety of reasons. "It could be because they are concerned about security on their supply chain or they are trying to understand the shift to digital and invest more in data analytics. Or the shift to hybrid workforce is what is probably getting them to think about Workspace (cloud-based productivity & collaboration tools) and so on,” he said.
Kurian has beefed up the workforce – 37,000 now, compared to 25,000 when he took over – and is also selling Google’s other products like Android and Maps to boost deals rather than just selling productivity apps and tools.
Microsoft Azure's revenue grew 51% in the last quarter, just slightly lower than that of Google Cloud, and from a bigger base. And while Google Cloud's revenue has been on the rise, the business is yet to see a profit. It had an operating loss of $591 million for the second quarter, compared to a profit of $7.7 billion for Microsoft’s corresponding quarter. But Google's number is down from $1.4 billion in the year-ago quarter, which impressed analysts.
